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Insurance Article

Two Wheeler Insurance Simplified

September 02 2015
Two Wheeler Insurance Simplified

What does a Two Wheeler Insurance Plan do?
A two wheeler insurance plan, offered by General Insurance Companies, aims to protect owner-riders from incurring out-of-pocket two wheeler repair costs. The plan also seeks to protect the rights of third parties who might have been injured or might have incurred a loss due to the owner-rider's fault. The plan provides:

Seven Great Insurance Tips for Every Two Wheeler Owner

1. Always opt for the mandatory cover
The mandatory cover or Third Party Liability Cover (TPL) is compulsory under The Motor Vehicles Act (1988). It protects the bike owner against any third party legal liability and reimburses the losses incurred by a third person.

2. Keep losses at bay with the Own Damage (OD) cover

Bike owners must opt for the Own Damage cover. While TPL (as mentioned above) protects the interests of a third party, Own Damage protects the owner against cost of damage to his/her 2-wheeler. One can steer clear of monetary losses in case the vehicle and/or its accessories are damaged or stolen. Damages due to both, natural and man-made calamities are covered. These include fire, cyclone, floods, riots, theft, etc.

1) Financial Security to Two Wheeler Owners

2) Protection against Third Party Legal Liability

3) Multiple Value-added Services

4) Peace of Mind While Riding


3. Take cover from accidents

While riding, it is imperative to secure yourself against the financial implication of meeting with an accident. A Personal Accident (PA) cover, inbuilt in a comprehensive two wheeler insurance plan, offers compensation on death/total permanent disablement and reimbursement of accidental hospitalization expenses. One can also opt to cover the pillion passenger. The amount of compensation receivable for death/disablement is:

4. Double-check your insurance premium before paying the amount

Checking the amount of premium charged is easy. All it needs is an understanding of a few terms and the premium formula. To start with, the amount of premium depends on various factors. Top among them are IDV (Insured's Declared Value) of your motorbike and the tariff rates issued from time to time by the IRDAI (The Insurance Regulatory and Development Authority of India).

Two wheeler IDV (Insured's Declared Value) = Ex-showroom price of your two wheeler + Cost of accessories - Depreciation (as per a pre-determined depreciation rate table provided by the IRDAI)

No Claim Bonus (NCB) = Bonus or incentive for riders who have not made a claim in the previous policy period. The amount of bonus gets deducted from your premium payable amount.

Premium Formula: Two-wheeler Insurance Premium Amount = TPL (Third Party Liability) Premium + OD (Own Damage) Premium + PA (Personal Accident) Premium

The details of the formula are:

TPL Premium OD Premium PA Premium
Rate: Fixed by IRDAI Rate: Fixed as per insurance tariff Rate: Fixed as per insurance tariff
Depends On: Vehicle cubic capacity Depends On: IDV Depends On: Amount of Policy
  Method: ( IDV*Tariff Rate )
+ ( cost of add-ons, if any )
- ( NCB, if any )
 

5. Follow the 3-Step Rule on meeting with an accident
The first three steps to be followed in case you meet with an accident are:

Step 1: Call your insurer's helpline number to register the claim
Step 2: Note the registration number of other scooter involved in the accident and contact details of witnesses, if any
Step 3: Get your two wheeler serviced and submit relevant documents for processing the claim

6. Look out for garages that offer cashless service
Check the list of cashless garages on your insurer's site. Ensure to avail cashless servicing at your nearest garage for a hassle-free experience.
To fortify your insurance plan, opt for add-ons like Zero Depreciation (lets you receive full amount in the event of a claim) and Garage Cash (offers you with a daily compensation amount while your bike undergoes repair work at a garage).

Two Wheeler Insurance Policy - At a Glance

Features TPL Insurance OD Insurance PA Insurance
Cover for bike owner    
Cover for pillion passenger (Up to Rs. 2 Lac)    
Cover for third party    
Compensation to nominee (in case bike owner meets with a fatal mishap)    
Compensation for permanent total disability (due to an accident)    
Cover for bike repair expenses (due to an accident)    
Reimbursement of accidental hospital expenses    
Cover against bike damage due to natural/man-made calamities    
Compulsory under The Motor Vehicles Act, 1988    

To sum it up, a comprehensive two wheeler insurance policy includes the following:
With hands-on knowledge about a two wheeler insurance policy, go ahead and make most of the beneficial features of your plan for a more pleasant driving experience.

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